Note 28
28. Pension commitments
Defined contribution schemes
All of the Group’s employees are eligible for membership of defined contribution pension schemes and of those eligible more than 99% are members of such schemes. Pension schemes’ assets are held in separate trustee-administered funds.
Pension costs for defined contribution schemes are as follows:
| 2009 | 2008 |
|---|---|---|
Defined contribution schemes | 11.8 | 9.4 |
Defined benefit schemes
The Group has two (2008 three) defined benefit pension schemes, all of which have been accounted for in accordance with IAS 19 “Employee benefits”.
The Surrey Advertiser Newspaper Holdings Ltd Pension & Life Assurance Scheme was closed to future accrual with effect from 31 March 2006. The most recent actuarial valuation of this Scheme was performed on 5 April 2006.
The Trafford Park Printers 1990 Pension Scheme was closed to future accrual with effect from 31 December 2006. The most recent actuarial valuation for this Scheme was performed on 1 April 2007. This scheme was acquired during the year as part of a business combination.
The valuations for both of the Schemes have been updated to 29 March 2009 by a qualified independent actuary. The main assumptions made by the actuary were:
| 2009 | 2008 |
|---|---|---|
Rate of increase for pensions in payment | 3.50% pa | 3.60% pa |
Rate of increase in deferred pensions | 3.50% pa | 3.10% pa |
Discount rate | 6.80% pa | 5.90% pa |
Inflation assumption | 3.50% pa | 3.60% pa |
Expected return on plan assets: |
|
|
Equities | 6.25% pa | 6.40% pa |
Real Estate | 6.25% pa | 6.40% pa |
Bonds | 6.80% pa | 5.90% pa |
Gilts | 4.25% pa | 4.40% pa |
Cash | 4.00% pa | 5.00% pa |
The Group has assumed that mortality will be in line with nationally published PMA92 and PFA92 mortality tables related to members’ years of birth and incorporating projected medium–term improvements to life expectancy. The assumptions are that a non–pensioner who retires in 2030 at age 65 will live on average a further 23 years after retirement if they are male and a further 26 years after retirement if they are female. A current pensioner aged 70 will live on average a further 17 years if they are male and a further 20 years if they are female.
The amounts recognised in the balance sheet are determined as follows:
| 2009 | 2008 |
|---|---|---|
Present value of funded obligations – all fully or partly funded | 23.1 | 14.8 |
Fair value of plan assets | (21.2) | (13.7) |
| 1.9 | 1.1 |
Plan liabilities not disclosed | – | 0.1 |
Net liability recognised in the balance sheet | 1.9 | 1.2 |
The amounts recognised in the profit and loss account are as follows:
| 2009 | 2008 |
|---|---|---|
Interest cost | 1.3 | 0.8 |
Expected return on plan assets | (1.0) | (0.7) |
Total pension cost recognised in the profit and loss account | 0.3 | 0.1 |
These charges are included in operating costs.
The amounts recognised in the statement of recognised income and expense are as follows:
| 2009 | 2008 |
|---|---|---|
Actuarial gains immediately recognised | 0.5 | 0.7 |
Changes in the present value of the defined benefit obligation are as follows:
| 2009 | 2008 |
|---|---|---|
At 31 March 2008 | 14.8 | 16.0 |
Acquisitions – through business combinations | 12.2 | – |
Interest cost | 1.3 | 0.8 |
Actuarial gains | (4.0) | (1.3) |
Benefits paid | (1.2) | (0.7) |
At 29 March 2009 | 23.1 | 14.8 |
Changes in the fair value of the schemes’ assets are as follows:
| 2009 | 2008 |
|---|---|---|
At 31 March 2008 | (13.7) | (13.3) |
Acquisitions – through business combinations | (9.6) | – |
Employer contributions | (1.6) | (1.0) |
Expected return on assets | (1.0) | (0.7) |
Actuarial loss | 3.5 | 0.6 |
Benefits paid | 1.2 | 0.7 |
At 29 March 2009 | (21.2) | (13.7) |
The actual return on plan assets was a loss of £2.5 million.
The Group expects to contribute £1.6 million to the defined benefit pension schemes during the year ending 28 March 2010.
The major categories of schemes’ assets are as follows:
| 2009 | 2008 |
|---|---|---|
Equities | 8.4 | 4.7 |
Bonds | 6.3 | 2.0 |
Gilts | 4.9 | 6.0 |
Real Estate | 0.7 | – |
Cash | 0.9 | 1.0 |
| 21.2 | 13.7 |
Analysis of the movement in the balance sheet liability:
| 2009 | 2008 |
|---|---|---|
At 31 March 2008 | 1.1 | 2.7 |
Total expense recognised in the profit and loss account | 0.3 | 0.1 |
Acquisitions – through business combinations | 2.6 | – |
Contributions | (1.6) | (1.0) |
Net actuarial gain recognised in the year | (0.5) | (0.7) |
At 29 March 2009 | 1.9 | 1.1 |
Cumulative actuarial losses recognised in equity:
| 2009 | 2008 |
|---|---|---|
At 31 March 2008 | 4.3 | 5.0 |
Acquisitions – through business combinations | 2.6 | – |
Net actuarial gain recognised in the year | (0.5) | (0.7) |
At 29 March 2009 | 6.4 | 4.3 |
The expected return on assets assumption has been derived by considering the current level of expected returns on risk–free investments (primarily government bonds), the historical level of the risk premium associated with the other asset classes in which the portfolio is invested and the expectations for future returns of each asset class. The expected return for each asset class was then weighted based on the target asset allocation to develop the expected long–term rate of return assets assumption for the portfolio.
